Entropylord is correct. $55 per barrel is a net revenue figure...

Entropylord is correct. $55 per barrel is a net revenue figure (ie net of production costs and royalties). This is heavy oil, and so you you have to discount the spot oil price (I think by about $13) to reach this margin figure. Thus the $55 margin they were referring to in Dec implies a spot oil price of about $93. The futures price for spot oil is currently averaging about $85 for the next couple of years, which would imply a net revenue margin to SAE of about US$50 per barrel.

According to some recent brokerage research, depreciation is running at A$1.5-2.5m pa, interest costs A$0.3m and there seems to be no tax, presumably through losses carried forward.

ie the revenue flows fairly cleanly to the bottom line. This report calculates the company's profit margins for next year at 71% and has it on a PE of 3.4x, with very good growth prospects going forward.

I think Salinas is just a stock that got unfairly bashed up during the downturn, which came just as it was turning on the taps for its production. It is not surprising that it should be buying its shares back, because they are bloody cheap!